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Know All About Mudra Loan Eligibility for New Business

  • 28-Feb-2022
Know All About Mudra Loan Eligibility for New Business

There is no doubt about the competition rising among the enterprises whether it’s a micro, small, medium or large units exists in India. As much as a business grows, that much GDP will be contributed to the country. Still, we found that some enterprises might have a great opportunity& solid business idea with them but cannot scale up their business due to lack of funds. Is that sound weird? Yes, it might be but there are various ways to arrange finance for business expansion.

The Government of India launched Mudra Loan Scheme under PMMY stands for Pradhan Mantri Mudra Yojana. The main objective of this scheme is to “fund the unfunded” enterprises. 

Under this scheme, credit is facilitated to micro and small enterprises. These funds can be used for various purposes related to business expansion. The Mudra scheme is categorized into 3 different categories:

CategoryMaximum Loan AmountObjective
SHISHURs. 50,000Individuals that are looking to start-up business at an early stage.
KISHORRs.5 LakhEntrepreneurs who are running units & looking for additional funds to expand business.
TARUNRs. 10 LakhIt can be availed by fully established businesses & funds can be used for business expansion.

Key features: -

  • New & existing enterprises can apply for mudra scheme loan
  • Mudra loan interest rate begins @7.30% annually & should not exceed more than 1% per month
  • No collateral/security required to obtain a PM mudra loan
  • Mudra’s official site developed specialized Mudra loan apps for its customers

Mudra Loan Details

Interest Rate7.30 % Onwards p.a
Loan AmountRanging from Rs.50,000 to 10 lakh
Processing FeeSubject to the lender
Loan TenureMaximum 84 months

Also Read:- Working Capital Loan Low Interest Rates

Eligibility for Mudra Loan

Any entrepreneurs with a solid business plan for non-farm income-generating activity including processing, manufacturing, trading or service sector are eligible. Especially, women belonging to SC, ST, OBC categories will be given preference. 

A lender wants its applicant to meet the criteria set by them, requirements shall differ from lender to lender, some of the common eligibility requirements are listed below: -

Age Criteria18 years – 65 years
Eligible UnitsBoth new & existing MSME units are eligible
Eligible Lending InstitutionsSmall Finance Banks, Micro Finance Institutions, Regional Rural BanksPublic& Private Sector Banks
Maximum credit limitApplicant credit limit should not exceed 10 lakhs
CollateralNo collateral/security required
DocumentsIdentity proof, address proof, application form along with 2 passport size photographs

Types of Industries Eligible for Mudra scheme loan

  • All non-farm enterprises
  • Shopkeepers
  • Food production
  • Business vendors
  • Fruit & vegetable dealers
  • Artisans
  • Small scale manufacture
  • Handicraft
  • Services based units
  • Repair shops
  • Self-employed entrepreneurs
  • Allied agriculture sector

How to check Mudra Loan Eligibility?

You can easily check your eligibility for mudra loans just by verifying a few details with the financeseva online portal, tapping on mudra loan under the unsecured category & simply filling the required fields, your eligibility status shall be shared over your registered Gmail address.


Eligible Lending Institutions that offer Mudra Scheme Loan

Whether you are a startup or existing MSME business unit looking for funds, Loans can be availed from the eligible lending institutions enrolled under mudra schemes:

  • Regional Rural Banks (RRBs)
  • Micro Finance Institutions (MFIs)
  • Small Finance Banks (SFBs)
  • Non-Banking Financial Companies (NBFCs)
  • Public& Private Sector Banks

Even though it’s a lending institution, they also need to consider certain parameters to meet the eligibility criteria set by mudra schemes as given below:

  • For commercial banks, the profit must be generated at least 2 years.
  • For lending institutions, private & private sector net worth should be above 250 Cr.
  • For rural banks, net worth should not be less than 50 Cr.

Also Read:-  MSME Loan Scheme

How to Apply for Mudra Loan?

To avail PM Mudra scheme loan, Follow the step-by-step guide: -

Step 1: Compare which lender is enlisted under the Mudra scheme & offer best interest rate on loan.

Step 2: Approach the lender online if they have an online application facility & visit offline to request an application, fill the required details with attaching relevant documents & submit the same.

Step 3: Once the lender gets satisfaction with your application, they would update the status via Email ID & take the process ahead to sanction.

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